2. Respondent Memo Final NUJS (3)
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Transcript of 2. Respondent Memo Final NUJS (3)
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Before
THEHONBLEHIGHCOURTOFDELHI, NEWDELHI
APPLICATIONNo _____/2013
Athlet!" G"#$e%&&&&&&&&'''&&&&&&&'&&&&&&&&&''' Petto#e(
v.
Go)e(#*e#t o+ I#"'&&&&&&&&&'''&&&&&&'''''''''''''''''''''''''''' Re%-o#e#t
With
CONTE.PTPETITIONNo _____/2013
Athlet!" G"#$e%&&&&&&&&&&&&&&&&&&&&&&&&&'Petto#e(
v.
Go)e(#*e#t o+ I#" &&&&&&&&&&'''&&&&''&'&&&''&&& Re%-o#e#t
.E.ORANDU.forTHEREPONDENT
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-Table of Contents- -Respondent-
TABLEOFCONTENT
Table of Contents........................................................................................................................... I
Index of Abbreviations..................................................................................................................II
Index of Authorities.....................................................................................................................III
Statement of Jurisdiction............................................................................................................VII
Statement of Facts....................................................................................................................VIII
Questions Presented....................................................................................................................XI
Summar of Pleadin!s...............................................................................................................XII
Pleadin!s and Authorities......................................................................................................... " # "
#. T$%&%SP'()%(TISJ*STIFI%)I(&%SCI()I(+T$%C'(T&ACTA()I(V',I(+
A&-IT&ATI'(......................................................................................................................" # "
#.# The Petitioner has failed to ma/e necessar disclosures to the &es0ondent............" # "
#.1 The Petitioner has been involved in Crimes of Financial Im0ro0riet....................." 1 "
#.2 The &es0ondent has not violated the Com0an3s trade secret ri!hts......................." 4 "
1 T$%A&-IT&A5A6A&)IS('T5IA-5%T'-%S%TASI)%........................................." 4 "
1.# The Petitioner has acce0ted the 7urisdiction of the Arbitrator.................................." 8 "
1.1 The Arbitrator is the sole 7ud!e of 9ualit and 9uantit of %vidence submitted......" : "
1.2 The Arbitrator3s vie; is in /ee0in! ;ith the Public Polic of India........................" < "
2 T$%&%SP'()%(TIS('T+*I5T='FCIVI5C'(T%>PT'FC'*&T ........................" #2 "
4. T$%&%SP'()%(TIS('T5IA-5%F'&P%&J*&=......................................................" #8 "
Praer......................................................................................................................................" #? "
.E.ORANDU.forTHEREPONDENT
I
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-Index of Abbreviations- -Respondent-
INDEOFABBREIATION
@ Section
@@ Sections
Para!ra0h
Para!ra0hs
A.P. Andhra Pradesh
A.C. A00ellate Cases
AI& All India &e0orter
Anr. Another
-om. -omba
Cri.5.J Criminal 5a; Journal
,.-. ,in!3s -ench
>ad. >adras
n. (ote
'rs. 'thers
>>)& >ines and >inerals B&e!ulation
and )evelo0ment ActD #E8achu si!ned them for a decade. -et;een #EE1
and 11D -raKil ;on the 6orld cu0 t;ice and reached the final once. - no; the com0an
had a full functional food de0artment.
II'
The means and methods em0loed b the com0an ;ere /e0t com0letel secret and the
0laers ;ere made to si!n a EE ear non disclosure a!reement. In 1D >r. Sumanto $a7elaD
the Indian >inister for S0orts and International AffairsD a00roached >r. 5aurie to hel0 out
;ith the Indian $oc/e Team. Pan Athletica incor0orated a ;holl o;ned subsidiar in the
Caman Islands BAthletica AtlanticaD and Athletica +an!es served as a ;holl o;ned
subsidiar of Athletica Atlantica in India . Follo;in! ne!otiations bet;een Pan Athletica and
the Indian +overnment BhereinafterD L+overnment3D ;herein all the !overnment3s concerns
;ere ta/en care ofD the 0arties entered into a contract on an Las is ;here is basis3 throu!h
LAthletica +an!es3 BhereinafterD LCom0an3D in 12. The Contract contained an Arbitration
Clause. )urin! the ne!otiationsD the Com0an made it clear that as 0er this contractD the
.E.ORANDU.forTHEREPONDENT
VIII
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-tatement of a0ts- -Respondent-
!overnment ;ould not be allo;ed to com0el the Com0an to reveal its means and methods.
Alon! ;ith this contractD members of the Indian $oc/e Team ;ere made to si!n an
a!reement containin! a non"disclosure clause. The Indian $oc/e Team fared ;ell bet;een
11 and 1#1.
III'
In 12D the -raKilian +overnment did not re"si!n ;ith Athletica >achu rather an en9uir
;as launched to loo/ into the 0ractices of the com0an and the en9uir lasted over five ears.
In Februar 1#1D durin! the celebration in an after 0artD a drun/ member of the Indian
$oc/e contin!ent revealed the success to the ma!ic biscuits the com0an !ave. This caused
u0roar in the countr. A hi!h level en9uir ;as launched b the +overnmentD ;hile The
Indian $oc/e Federation en!a!ed the services of a 0rivate detective com0an. The Indian
+overnment also invo/ed the Arbitration clause and served a notice on the com0an.
I'
Athetica +an!es filed a 0etition for interim reliefD to sto0 the +overnment from brea/in! the
contract. The )elhi $i!h Court admitted the 0etition and durin! the course of 0roceedin!sD
the Addl. Solicitor +eneral ;ho a00eared before the Court !ave an underta/in! that 0endin!
0ro0er resolution of the issue it ;ould not brea/ the contract. In the meantime the -raKillian
en9uir ;as 0ublishedD and relin! on that a local -raKillian Court held Atheletica >achu to
be !uilt of environmental violations and 0ain! several bribes. The *nited States
commenced investi!ations under the Forei!n Corru0t Practices ActD #E
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-tatement of a0ts- -Respondent-
In the on!oin! Arbitration 0roceedin!sD the Arbitrator too/ note of the above facts alon! ;ith
-raKilian 7ud!mentD the intimation of the *.S. investi!ationsD the 6A)A !uidelines and
9uotes all as0ects of Indian la;. The +overnment ;as also able to 0resent the re0ort of the
0rivate investi!atorsD ;hich relied on several emails ;hich ;as 0rivile!ed communication
and excer0ts of the -raKilian 7ud!ment. The +overnment also 0roduced the affidavits of the
0laerD Sushant Sin!h 5a//arba!ha. Amon!st the evidence submitted for arbitrationD there
;ere a lar!e number of e"mails ;hich dealt ;ith ver sensitive information about the formula
of the food and nutrition 0roducts administered to the athletesD information of ban/ Ac3sD and
certain communication ;hich ;ere su00osed to be la;er"client 0rivile!ed information. All
these e"mails ;ere for;arded b an e"mail id aceventuraN0anatheletica.us. The com0an
;ent on record to sa that there ;as no 0erson in the em0lo of the com0an b the name of
Ace Ventura. In the affidavit submitted b the athleteD he s0o/e at len!th about the 0rocedure
of the trainin! and the diet. The Com0an raised man ob7ections to the 0rocedure of the
conduct of the 0roceedin!s and the rules to evidence attachedD but each ob7ection ;as
re7ected. The Com0an also filed a Civil Contem0t Petition a!ainst the +overnment.
I'
At the end of the arbitrationD the a;ard held that the com0an ;as indeed en!a!ed in do0in!
and that it had both ille!al and unethical means to administer the team. The arbitrator
a;arded unli9uidated dama!es to the tune of O# billion dollars to the +overnment. A!!rieved
b this a;ardD the Com0an a00roached the )elhi $i!h Court in the instant 0etition. The
com0an submitted that the entire arbitration ;as a farce as information obtained b the &TI
indicated that the decision to brea/ the contract ;as alread ta/en b the minister even before
the interim relief a00lication.
.E.ORANDU.forTHEREPONDENT
X
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-ummar% of /leadin(s- -Respondent-
U..AR6OFPLEADING
1' THE REPONDENT I 4UTIFIED IN RECINDING THE CONTRACT AND INO7ING
ARBITRATION
The &es0ondent submits that the contract ;as rescinded due to there bein! misre0resentation
of material facts b Athletica +an!es B 8The Co*-"#9:D as ;ell as the commission of
offences. This !ives rise to a dis0ute ;ith re!ard to the contractD and hence the &es0ondent is
7ustified in invo/in! arbitration. This submission is threefold irstl%)the Com0an did not
ma/e necessar disclosures. e0ondl%D the Com0an has been involved in financial
im0ro0riet. Thirdl%D the &es0ondent has not violated the Com0an3s trade secret ri!hts.
2' THEARBITRALAWARDINOTLIABLE TOBEETAIDE
It is humbl submitted that the A;ard is not liable to be set aside under the 0rovisions of
Section 24 of the AC Act. This submission is threefold irstl%D The Petitioner has acce0ted
the 7urisdiction of the Arbitrator. e0ondl%D The Arbitrator is the sole 7ud!e of the evidence.
Thirdl%D The Arbitrator3s vie; is in /ee0in! ;ith the Public Polic of India.
3' WHETHERTHEREPONDENTIGUILT6OFCIILCONTE.PTOFCOURT'
It is submitted to the $on3ble Court that the res0ondent is not !uilt of civil contem0t of
Court. This assertion is t;ofold.irstl%D the im0u!ned order is a consent decree and hence
non com0liance of order does not amount to contem0t of court. e0ondl%D the res0ondent has
not committed the offence of contem0t even if the decree has bindin! nature.
;' WHETHERTHEREPONDENTGUILT6OFPER4UR6'
It is submitted to the $on3ble Court that the res0ondent has not committed the act of 0er7ur.
&es0ondent has not submitted an false evidence there is also a lac/ of Intention on the 0art
of the res0ondent. $ence res0ondent is not !uilt of 0er7ur.
.E.ORANDU.forTHEREPONDENT
XII
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-ummar% of /leadin(s- -Respondent-
.E.ORANDU.forTHEREPONDENT
XIII
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-ummar% of /leadin(s- -Respondent-
PLEADINGANDAUTHORITIE
1' THE REPONDENT I 4UTIFIED IN RECINDING THE CONTRACT AND INO7ING
ARBITRATION
The &es0ondent submits that the contract ;as rescinded due to there bein! misre0resentation
of material facts b Athletica +an!es BhereinafterD 8The Co*-"#9: in enterin! into the
a!reementD as ;ell as the commission of offences relatin! to financial im0ro0riet. This !ives
rise to a dis0ute ;ith re!ard to the contractD and hence the &es0ondent is 7ustified in
submittin! the matter to the arbitrator. This submission is threefoldirstl%)the Com0an did
not ma/e necessar disclosures. e0ondl%D the Com0an has been involved in financial
im0ro0riet. ThirdlD the &es0ondent has not violated the Com0an3s trade secret ri!hts.
#.#.# The /etitioner has failed to make ne0essar% dis0losures to the Respondent;
It has been held b the Su0reme Court #that a re0resentation is deemed to have been false
and therefore a misre0resentationD if it ;as at the material date false in substance and in fact.R
The Court also observed that Section #< of the Contract Act defines fraud as act committed
b a 0art to a contract ;ith intent to deceive another. FinallD the Court relied on the
landmar/ 7ud!ement on the issue in $err% v. /eek1to determine that a fraud is 0roved ;hen
it is sho;n that a false re0resentation has been made B# /no;in!lD or B1 ;ithout belief in
its truthD or B2 rec/lesslD careless ;hether it be true or false.R
The &es0ondent humbl submits that as 0er the contract ne!otiations entered into b the t;o
0artiesD the +overnment had clearl ex0ressed its concerns re!ardin! the e0isodesR in -raKil.
To facilitate contract ne!otiationsD the +overnment had also as/ed the Com0an to submit
#hrisht $hawan v. &=s. haw ,rothersD B#EE1 # SCC 824D at 1.
1$err% v. /eekD B#??E #4 A00 Cas 22
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an 0ertinent information on these develo0ments and that the same shall be considered under
the necessar disclosures to be made in the matter. To this the Com0an re0lied on ##"2"
12 that nothin! ;ith re!ard to the issue ;as Lconcrete3. It is also established fact that the
-raKilian +overnment had decided not to 0ursue an extension of the Petitioner3s contract
after 11D and had in fact launched an investi!ation. $enceD the &es0ondent submits that the
Petitioner3s stance that nothin! ;ith re!ard to this issue ;as Lconcrete3 must be construed as a
fraudulent misre0resentation as 0er Section #< of the Contract Act.
>oreoverD even in case the contract ;ere to be loo/ed at b the &es0ondent on an Las is
;here is basis3D the acce0ted le!al 0rinci0le is that as is ;here isR cannot be extended to
include even lar!e discre0ancies.2$enceD even if the &es0ondent in the instant case did enter
into the contract on an Las is ;here is basis3D it did not miti!ate the obli!ation of the Petitioner
to act res0onsibl.4 The &es0ondent asserts that en9uiries relatin! to economic crimesD
environmental la;D and do0in! in -raKil did amount to Llar!e discre0ancies3 that the
Petitioner ;as obli!ed to inform the +overnment about as 0er the above le!al 0recedent.
The &es0ondent avers thatD !iven the fraudulent misre0resentation on the 0art of the
PetitionerD the &es0ondent ;ould have the o0tion to rescind the contract and see/ dama!es
throu!h arbitration. This falls in line ;ith the reasonin! of the Su0reme Court.8
#.#.1 The /etitioner has been involved in Crimes of inan0ial Impropriet%;
The Prevention of >one 5aunderin! Act: las do;n that a mone launderin! offender
Ldirectl or indirectl attem0ts to indul!e in or /no;in!l assists in or is actuall involved in
2&an#u Gupta v. $elhi $evelopment Authorit%D #2 B12 )5T
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an 0rocess or activit connected ;ith the 0roceeds of crime and 0ro7ectin! it as untainted
0ro0ert.3 AlsoD it has been established b Indian courtsstandard 0ontra0t
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/art% Autonom%alhotra and Indu >alhotraD LThe +aw and /ra0ti0e of Arbitration and Con0iliation
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In .*. &alhotra v. Airport Authorit% of India1D a division bench of this Court held that
Sections #: and 24 of the AC Act need to be read to!ether in dealin! ;ith a 0etition for
settin! aside of an arbitral a;ard. The Court in this case relied on 0recedent laid do;n b the
Su0reme Court1#to establish that in the absence of an ob7ection Section #: of the AC Act
bein! raised before the arbitral tribunal re!ardin! the tribunal3s 7urisdictionH the 0art ;aives
the ri!ht to ma/e such an a00eal a!ainst the tribunal3s 7urisdiction before the Court under
Section 24 of the AC Act.
In the above mentioned casesD the 0arties see/in! to set aside the a;ard had not raised
ob7ections to the arbitral tribunal3s 7urisdiction before the tribunal itself as 0er Section #: of
the AC Act. In factD in these casesD these 0arties had submitted to arbitrationD and had
directl raised the 7urisdictional challen!e before the Court. In such a scenarioD Indian Courts
have held that the 0arties have ;aived their ri!ht to raise a 7urisdictional challen!e. In this
caseD Athletica +an!es has not raised an 7urisdictional challen!e before the arbitrator
himself. ThusD it is submitted b the &es0ondent that the Petitioner has ;aived its ri!ht to
challen!e the Arbitrator3s 7urisdiction. $enceD the 0etition to set aside the a;ard under
Section 24B1BaBiv should not be entertained.
1.1 The Arbitrator is the sole #ud(e of ?ualit% and ?uantit% of !viden0e submitted ;
In,*+ v. ,W+ Industries +td.11the Court noted that the AC Act of #EE: has !one a ste0
further than the Act of #E4 in em0o;erin! the arbitrator. It ;as observed that the arbitrator
shall be the sole 7ud!e of the 9ualit and 9uantit of evidenceD and that the Court shall not be
1.*. &alhotra v. Airport Authorit% of IndiaD 1? B1 A&- 5&
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dra;n into re"a00raisin! the evidence. It has been reasoned that the 0arties have selected their
o;n forum and thatD in doin! soD the have conceded the 0o;er of a00raisement of the
evidence to the arbitrator.12
In the instant caseD the 0arties had a!reed that the Procedure of arbitration ;ould be decided
durin! the arbitration. FurthermoreD the Petitioner3s claims ;ith re!ard to the rules of
evidence have alread been loo/ed into and re7ected b the arbitrator.14$enceD it is submitted
that the Arbitrator has alread considered the 9ualit and 9uantit of evidence in determinin!
the arbitral a;ard. The &es0ondent submits that the aforementioned le!al 0rinci0les limit the
sco0e of the Court in a00raisin! evidence.
1.2 The ArbitratororeoverD since the Sa; Pi0es CaseD the Courts in India have !iven a ver restrictive
meanin! to 0atent ille!alitD in an attem0t to minimiKe the effect of the 7ud!ement. 1? In the
12&uni0ipal Corporation of $elhi v. 2a(an *ath AshokD B#E?
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instant caseD ho;everD the &es0ondent submits that none of the conditions 0recedent are
satisfied. In order to substantiate this assertionD the &es0ondent shall deal ;ith it in a t;o"
0ron!ed manner.irstl%)The standard of 0roof re9uired in cases of s0orts do0in! is not as
hi!h as L0roof beond reasonable doubt3. e0ondl%D the evidence submitted before the
arbitrator ma/es the a;ard a L0lausible3 oneD thereb ne!atin! the need for Court interference.
B.D.E. The ,urden of /roof to be dis0har(ed is one of >Comfortable atisfa0tion
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-ased on the above la;D the &es0ondent asserts that in ad7udicatin! ;hether the a;ard is
liable to be set aside on the !rounds of it conflictin! ;ith the 0ublic 0olic of IndiaD the Court
must loo/ at the arbitral a;ard throu!h the 0rism of ;hether the burden of LComfortable
Satisfaction of the hearin! bod Bi.e. the arbitrator3 has been dischar!edD and not ;hether the
alle!ations could be 0roved beond reasonable doubt.
B.D.B The Award) based on the eviden0e submitted) is a >plausible< one;
The &es0ondent submits that the 0osition of la; in relation to evidence admissible under
cases 0ertainin! to anti"do0in! rule violationsD es0eciall ;here the dru! administered is
Ldifficult to detect3D allo;s for the admissibilit of Circumstantial evidence as o00osed to
merel do0e test results.24>oreoverD the 6A)A Code bans !ene do0in! as a 0rohibited
0ractice under the 1#1 Prohibited 5istD ;hich has been acce0ted b the (A)A.28AlsoD it is
;ell /no;n that !ene do0in!D as has been carried out b the Petitioner in the instant caseD is
difficult to detect.2:
In the instant caseD the &es0ondent submits that there is enou!h circumstantial evidence in the
form of documentsD internal records of the com0anD and testaments !iven b the 0laers to
corroborate the alle!ations a!ainst the com0an of committin! anti"do0in! rule violations as
0er Article 1 of the (A)A &ules.2
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administerin! of 0erformance enhancin! dru!s2E are 7ustified. This vie; is further
substantiated b cases arisin! out of the L,A+C1 Controvers%3D ;herein the CAS and the *S
)istrict Court of (orthern California relied on similar circumstantial evidence to establish
!uilt of the 0arties.4
ThusD it is submitted b the &es0ondent that the arbitrator has carried out a 7ust evaluation of
the evidence 0resented. This submission is dealt ;ith under the follo;in! heads of evidence
that ;ere administered in the arbitral 0roceedin!s
a. :alidit% of the emails produ0ed b% the (overnment.
Private interest of a 0art is not sufficient ;arrant for denial of a00lication on the basis of
confidentialit.4# In*orwi0h /harma0al Co v. Commissioners of Customs !x0ise41)it ;as
held that Lpubli0 interest
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It) therefore) follows that neither b% invokin( the spirit of our Constitution nor b% a strained
0onstru0tion of an% of the fundamental ri(hts 0an we spell out the ex0lusion of eviden0e
obtained on an ille(al sear0h.R4:The Lprivile(e3 of the clients to the communication ;ith
la;er onl extends to non disclosure b la;er or an of his subordinates. 4
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that the arbitrator ;ould have corroborated this information ;ith the information of the
formula of food 0resent in the emails. The arbitrator has relied on these evidences to a;ard
dama!es to the !overnment. Therefore it can be inferred that the Athletica +an!es has used
the same !eneticall modified bacteria and hence is liable for do0in!.In Ar(uendoD a certified co0 of a forei!n 7ud!ment b the ori!inal le!al /ee0er ;ith a
certificate b the Indian Consul is admissible in the court of la;.8The 0resum0tion lies in
favour of the 7ud!ment if the o00osition has not raised an ob7ection as to its content. 8#In the !iven facts there is no ob7ection raised as to the content of the relevant 0arts of the
7ud!ment. SecondlD the facts are silent on the issue of it bein! certified. $ence the arbitrator
has correctl relied on the 7ud!ment.0. :alidit% of the affidavit of the pla%er.
Arbitrator is not bound b the la; of evidence of India.81'b7ection as to manner of adducin!
evidence is a matter of 0rocedure and it is an established 0rinci0le that 0arties to arbitration
have selected their o;n forum and that in doin! soD the have conceded the 0o;er of
a00raisement of the evidence to the arbitrator.82The affidavit in 9uestion !ives corroborative
evidence of the relevant facts.84 In the !iven factsD the com0an has not challen!ed the
content of the affidavit. Therefore affidavit containin! relevant facts should be ta/en into
account b the arbitrator as it !ives relevant evidence as to the manner of do0in! and other
0rocedures ta/en u0 b the com0an for enhancin! the 0erformance of the 0laers. $ence his
reliance on the affidavit is valid.-ased on all the above la;D the &es0ondents submit that the arbitrator3s vie; is L0lausible3D
and henceD not liable to be set aside.8The Indian %vidence ActD #?
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2'; THEREPONDENTINOTGUILT6OFCIILCONTE.PTOFCOURT'
It is submitted that the res0ondent is not !uilt of contem0t. This assertion is t;ofold. irstl%D
the order is a consent decree and hence non com0liance of the order is not contem0t of court.
e0ondl%D the res0ondent has not committed the offence of contem0t even if the decree has
bindin! nature.
2.#. The impu(ned order is a 0onsent de0ree.
In a case of consent decree 0assed b a courtD disobedience of the underta/in! recorded in the
decree !iven b a 0art to the other does not amount to contem0t. 88Consent decree is in the
nature of a solemn contract of the 0artiesD made under the sanction of the court ;ith a mutual
consent of the 0arties.8:In the !iven factsD the order of the court is formed b the consent of
the 0arties and is in nature of a contract to 0erform the terms of the contract ;ith each other.
Therefore an disobedience of the said decree does not amount to contem0t of court.
D.B. The respondent has not 0ommitted the offen0e of 0ontempt even if the de0ree has
bindin( nature.
In Ar(uendoD The res0ondent has not committed the offence of contem0t even if the decree
has bindin! nature. This assertion is three fold.irstl%D there ;as no ;ilful disobedience on
their 0art. e0ondl%D there ;as 0artial com0liance ;ith the order. +astl%D the subse9uent
chan!es made it difficult to com0l ;ith the orders.
2.1.#. There ;as no L;ilful3 disobedience.
88 *isha "anta Ro% Choudhar% v. mt. aro# ,ashini GohoD AI& #E4? Cal 1E4 B)-.,abu Ram Gupta v.
udhir ,hasinD AI& #E
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There is no strai!ht 7ac/et formula for the meanin! of L;ilful3 and it differs from case to
case.8
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order had created difficulties for the res0ondent to com0l ;ith the order. $ence it humbl
submitted that the res0ondent should not be held liable for civil contem0t of court.
4. THEREPONDENTINOTLIABLEFORPER4UR6.
*nderta/in! !iven to court is an affidavit.:2. An affidavit includes affirmation and
declaration in the case of 0ersons b la; allo;ed to affirm or declare instead of s;earin!. :4
6hoever in an declaration made b him to an court of 7usticeD ma/es an statement ;hich
is falseD and ;hich he believes to be either false or does not believe to be trueD touchin! an
0oint material to the ob7ect for ;hich the declaration is made shall be 0unishable in a !rave
manner as if he !ave false evidence.:8To establish false evidenceD it must be sho;n that the
false statement char!ed a!ainst the accused is Lliterall3 false. There must be statement of fact
;hich is false. It is no offence if the fact stated is true but some circumstance is su00ressedD
;ith a result that the ;ron! inference can be deduced. ::Intention is an im0ortant in!redient
for 0rosecution of 0er7ur. :
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intention to continue after the order. A court order can be 0resumed to chan!e the intention of
the res0ondent causin! fear for liabilitD unless 0roven to the contrar. It is humbl submitted
to the $on3ble court that res0ondent shouldn3t be held !uilt of 0er7ur.
.E.ORANDU.forTHEREPONDENT
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